Lord Crickhowell: My Lords, can I encourage the Minister by saying that I agree with what he has been saying? I think there is a point that needs to be taken into account. Because we are on Report I can make the point only by intervention. If he can meet us at least half way while providing the flexibility that I agree is required, I for one will be satisfied.

Lord McIntosh of Haringey: My Lords, I had reached the word "but". We recognise the strength of feeling on the matter and we want to do what we can to address the concerns expressed. We must ensure that Ofcom has the flexibility to treat different services differently, but within that we will look at whether we can find some alternative wording that would be more satisfactory.

We hope that it will be possible to incorporate the word "significant"which I believe was the fallback position of my noble friend Lord Puttnamperhaps with a qualification to ensure that Ofcom's flexibility is preserved. We will come back with suggestions on Third Reading.

Lord Puttnam: My Lords, I thank the Minister for that generous offer. I agree entirely with the noble

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Lord, Lord Crickhowell, that the first part of the Minister's answer was accurate and absolutely fair. I would settle comfortably on the word "significant". I shall make one other point with respect to "suitable". We live in a world of downward pressure: on costs and on quality. I have always been concerned that the word "suitable" represented an escape clause for those who wished to press downwards. I think "significant" would serve nicely and I hope that it finds an ability to commend itself to the Government. I beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendments Nos. 146B and 146C not moved.]

Clause 282 [Regional programmes on Channel 3]:

[Amendments Nos. 146D to 146M not moved.]

Lord Crickhowell moved Amendment No. 147:

After Clause 282, insert the following new clause

"VARIATION OF PUBLIC SERVICE OBLIGATIONS OF CHANNEL 5
(1) In the event that the share of audience or share of revenue of Channel 5 for any twelve month period is in excess of 15 per cent, as measured by OFCOM in their review under section 351, the Secretary of State shall by order, require OFCOM to review the conditions placed upon Channel 5 under sections 274 and 281.
(2) Following such a review, OFCOM shall be required to increase the proportions of original and regional programmes required to be produced by Channel 5 to meet or exceed those most recently required of Channel 3.
(3) In the event that Channel 3, in the same period, had a share of audience or share of revenue below 15 per cent, the proportions of original and regional programmes required to be produced by Channel 5 should be no less than those levels produced by Channel 3 when its share of audience was last at or above 15 per cent."

The noble Lord said: My Lords, my noble friend Lord Renton of Mount Harry, who tabled the amendment, cannot be here tonight. I added my name to it because I have been an advocate of future-proofing. It seemed a good idea to provide for a situation where Channel 5 might grow and have a much larger share of business than it has at present.

That is all I need to say about the amendment. The object is to future-proof and provide for what might well happen in the future. Whether it is perfect in its present form I would not know; I suspect that, as usual on these occasions, Ministers will find technical faults. But the principle seems absolutely sound. It is right, even in the absence of my noble friend Lord Renton of Mount Harry, that we should have the opportunity for a brief debate on the principle and to hear what the Minister has to say. I beg to move.

Viscount Falkland: My Lords, we on these Benches agree with the amendment in the name of the noble Lord, Lord Renton of Mount Harry, and the explanation given by the noble Lord, Lord Crickhowell. We think it is a sensible approach. I spoke to the amendment last time; in fact I agreed with the noble Lord, Lord Renton of Mount Harry, to put my name to it, but something went wrong with a

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technicality in our procedures. I repeat that I agree with the sensible provision for the future contained in the amendment.

Lord Brooke of Sutton Mandeville: My Lords, I indicated in Committee a sympathy for my noble friend Lord Renton of Mount Harry's then-Amendment No. 233A. I rise again in his absence on Report to support his Amendment No. 147. Indeed, I go a little further than my noble friend Lord Crickhowell.

I appreciate that returning to the issue on Report might be regarded as an example of the self-indulgence to which the Leader of the House alluded the other day, but I hope that I shall be forgiven for using this opportunity to reflect a little further on what the noble Lord, Lord Davies, said about my noble friend's amendment in Committee. He first said that Ofcom's discretion would be circumscribed in setting targets by this amendment through its concentration on viewer numbers, and I acknowledge the logic of that.

Secondly, however, he went on to say that the then Amendment No. 200, which is not part of this package now, might,

"lead to decreases in the various requirements on public service channels in response to falling revenues and audience shares, rather than increases".[Official Report, 3/6/02; col. 1216.]

This does not seem a fair charge tonight against the wording of my noble friend's Amendment No. 147.

Finally, the noble Lord said that my noble friend's then amendment, which is parallel to tonight's, would have represented a penalty for success and might have led a shrewd channel owner to curb the channel's growth in viewers when it was approaching the high jump bar which my noble friend's amendment represented. I appreciate that the noble Lord, Lord Davies, was not speaking to the issues of media ownership at col. 1216 for those issues then lay ahead of us, just as they do tonight. But they certainly underlay the motivation of my noble friend's amendments in Committee as well as on Report this evening.

A powerful plank in the Government's arguments for their media ownership proposals in the Bill is the desire to encourage investment. But any businessman, like the shrewd channel owner which the noble Lord, Lord Davies, mentioned in Committee and to whom I have just referred, prefers, when making an investment, to deal with known facts and with constants rather than with variables and uncertainties. We all know how much the independent channels have overpaid the Treasury for their licences in the past and thus foregone the capital they could have invested in their regional channels' programming because one cannot spend the same money twice.

The same observation, incidentally, applies to the Treasury's much larger recent auction for the telecommunications licences. The Treasury may smile in both instances but the massive, excessive expenditure in acquiring the licencesagain, in both instancescannot represent investment in the productive side of the two respective industries.

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So I support the efforts of my noble friend Lord Renton of Mount Harry to introduce certainty rather than uncertainty into genuine investment decisions, and I support my noble friend Lord Crickhowell in bringing this matter back for consideration in your Lordships' House at Report.

Lord McIntosh of Haringey: My Lords, the purpose of this amendment seems to be to allow Ofcom to ratchet up Channel 5's original production and regional programme-making requirements if its audience share or share of revenues exceed 15 per cent. We discussed this amendment in detail in Committee. It seems to be an attempt to deal with concerns about the future ownership of Channel 5. That is really what is behind it; we will be discussing it tomorrow and I shall leave my arguments on that major issue and on the related issues of plurality and public interest tests in merger legislation until we reach that point. In the meantime, I have some comments about this amendment which, if the noble Lord, Lord Crickhowell, will forgive me, I do not think will survive the major debates we have tomorrow.

I am not persuaded of the need for this amendment for two reasons. First, I am not convinced it will have the right effect. A 15 per cent target might appear an appropriate level for audience share or share of investment in the current climate, but we can only guess at how the broadcasting landscape could look in, say, five years' time. If there is really an expansion of successful channels, possibly nobody will get 15 per cent, in which case this does not seem very relevant. To have a rigid threshold based on 2003 audience share levels on the face of the Bill seems unhelpful.

Furthermore, the amendment only considers the relationship between Channel 5 and Channel 3. I do not think it is right to make a direct and inflexible comparison between these two public service channels, particularly when it is possible that both channels could in the future find themselves in a weaker market position as multi-channel viewing gains groundwhich is another way of saying what I have just said in my own words.

Secondly, Ofcom already has a range of powers to ensure that targets for original and regional production are set and maintained at the right levels. These include the annual factual and statistical report on television and radio services in the United Kingdom, which will include consideration of the financial condition of the market and any trends appearing or operating in the size of the audience; regular reviews of the public service remit and the extent to which public service broadcasters have provided television services which, as a whole, fulfil the purposes of public service broadcasting in the United Kingdom; and the review of various public service obligations, including original and regional productions, on a change of control of a Channel 3 or Channel 5 licence, to ensure that standards do not fall.

As well as those specific powers, the Bill also preserves for Ofcom a general power under the Broadcasting Act 1990 to vary a licence having given the holder a reasonable opportunity to make

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representations. So Ofcom may at any time alter the original and regional production requirements following consultation with the licence holder.

I am confident that Ofcom will set the right targets, review them as appropriate and take action when necessary. I am therefore not persuaded that a further, very specific power of the nature proposed is needed.

9.45 p.m.

Lord Crickhowell: My Lords, the Minister has given a helpful response in the sense that he has spelt out the powers available. As on many occasions I have advocated that Ofcom is the right body to review such matters and to put forward subsequent advice or take decisions, I accept much of what he has said. The point has been made, and in the circumstances it is right for me to beg leave to withdraw the amendment.

Amendment, by leave, withdrawn.

[Amendment No. 148 had been re-tabled as Amendment No. 152A.]

Clause 298 [Code relating to provision for the deaf and visually impaired]: